China’s Fosun and Ping An Insurance Vying to Buy $1.6 Billion Berlin Complex

Article

Fosun International Ltd., backed by Chinese billionaire Guo Guangchang, is vying with Ping An Insurance (Group) Co. to acquire 18 buildings on Berlin’s Potsdamer Platz square, people with knowledge of the matter said.

Fosun and Ping An, China’s second-largest insurer, have been in separate talks since last year with the SEB AB unit that owns the complex, the people said, asking not to be identified because the information is private. Stockholm-based SEB hired Eastdil Secured LLC to market the properties for about 1.5 billion euros ($1.6 billion), people with knowledge of the process said earlier this week.

If the Potsdamer Platz portfolio sells for that amount, it would be the biggest German commercial property sale since 2007, according to Jones Lang LaSalle Inc. Chinese companies have been increasing acquisitions of commercial property in Europe, where yields are higher than for similar buildings at home. Buyers from the country spent $39 billion on global real estate in the six years ended in 2014, up from $92 million in 2008, according to Real Capital Analytics Inc.

Representatives for Fosun, Ping An and Frankfurt-based SEB Asset Management, which holds the properties in a mutual fund, declined to comment.

Berlin Landmark

Potsdamer Platz, now dominated by luxury hotels and office towers, was a bombed-out wasteland for 50 years after World War II, with the wall dividing east and west Berlin tearing through it. After reunification, Daimler AG and Sony Corp. invested more than 1 billion euros to build a complex of skyscrapers and cinemas around a roofed-in plaza that’s now one of the city’s most recognizable landmarks.

SEB acquired the Potsdamer Platz complex in 2008 for about 1.4 billion euros. The property has about 500,000 square meters (5.4 million square feet) of offices, apartments, public plazas and buildings including the Mandala Hotel, a CinemaxX AG cinema and the Arkaden shopping mall.

London-based brokerage Savills plc plans to buy SEB Asset Management for as much as 21.5 million euros, SEB said in a statement Thursday. The deal is expected to close in the middle of 2015. The Potsdamer Platz portfolio is held by SEB Asset Management’s ImmoInvest mutual fund, which by law must be dissolved by April 30, 2017.

London, Tokyo

Ping An, which bought Lloyd’s of London building and Tower Place in the English capital, aims to diversify its property portfolio. The insurer bid for the Squaire, a building in Frankfurt valued at about 1 billion euros, people with knowledge of the matter said in December. The Squaire sale was cancelled in January because the bids were too low, owner IVG Immobilien AG, said at the time.

Fosun, a Shanghai-based conglomerate whose investment portfolio ranges from French resort operator Club Mediterranee SA to Greek jewelry-maker Folli Follie, has been acquiring overseas property as it seeks higher yields. The company has bought office buildings in Tokyo and Sydney, including Citigroup Center in the Japanese capital, after purchasing New York’s One Chase Manhattan Plaza for $750 million in 2013.

–With assistance from Zhang Dingmin in Beijing.